Under what conditions will the 24-month period for covenants be tolled for a Stretch Zone franchisee?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) Tolling. You agree that the 24-month period will be tolled for any period during which you are in breach of the covenants or any other period during which we seek to enforce this Agreement.
Source: Item 8 — Receipts. Any sale made must be in compliance with § 683(8) of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which describes the time period a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earliest of the first personal meeting or ten (10) business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship. (FDD pages 99–263)
What This Means (2025 FDD)
According to the 2025 Stretch Zone Franchise Disclosure Document, the 24-month period for covenants can be extended under specific circumstances. The agreement states that the 24-month period will be tolled, or suspended, for any duration during which the franchisee is in breach of the covenants outlined in the agreement. Additionally, the tolling applies to any period during which Stretch Zone seeks to enforce the agreement.
This means that if a Stretch Zone franchisee violates any of the covenants within the franchise agreement, the time spent in violation will not count towards the 24-month period. Similarly, if Stretch Zone initiates legal action to enforce the agreement, the period of enforcement will also be added to the initial 24-month covenant period.
This provision protects Stretch Zone by ensuring that franchisees cannot avoid their obligations simply by running out the clock. It also allows Stretch Zone to take action against franchisees who violate the agreement without losing the ability to enforce the covenants later on. Franchisees should be aware of this clause and ensure they remain in compliance with all covenants to avoid extending the restrictive period.